Super industry 'sucking off the public teat'

The boss of one of Australia's biggest super funds says the industry is "sucking off the public teat" with "manifestly excessive" remuneration.

Australian Super's chief executive Ian Silk says the rapidly growing $1.5 trillion superannuation sector owes its very existence to the Federal Government's requirement of compulsory employer contributions as well as various super tax concessions.

"The taxation legislation, the SG (Superannuation Guarantee Charge) legislation, you take that away and we don’t have a super system," he told the audience during a panel discussion at the Australian Securities and Investments Commission's annual conference.

"So all of us that work in the system should be held to a higher sense of conduct than applies in the normal field of general commerce."

Mr Silk says that while many in the sector act with the best interests of members at heart, there is also a long queue of financial advisors and wealth managers looking to take a cut out of people's retirement savings.

"There's so much money washing through this industry; there are so many people who clip the ticket here, clip the ticket there," he said.

"Remuneration is manifestly excessive as a general proposition through this industry, and yet we are all sucking of the teat of the public purse in a sense, or public policy."

Mr Silk was not alone on the panel in his criticism of the superannuation sector.

Caltex chairman and Westpac director Elizabeth Bryan, who also has an extensive background in superannuation and funds management, says the industry is charging boom-time fees.

"We are an industry that has been through a huge boom - it's still going to go through a huge boom - and all those boom characteristics do ripple through the fees and charges and the remuneration," she said.

"As an industry, with our regulations, we should think about that."

Elizabeth Bryan agrees with Mr Silk that the super industry should be obliged to act in the best interests of its customers, rather than maximising the fee income it can earn.

"I come from Ian's position where I think we are an industry that lives off a legislative requirement for people to give us their money, so we do owe a duty of care, we owe a high duty of care," she added.

"You start to think about the pension phases ... you think about your end client as someone who is trying to live off $50,000 a year, and that kind of gets you back to where life is lived."

The ABC's economics correspondent Stephen Long was chairing the panel discussion.